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A warehouse misses its weekly profit target
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
Fictional and illustrative. You run a warehouse near Kuala Lumpur, Malaysia, that handles 40,000 online orders a week for retailers. It is paid MYR 12 per order. Labour costs MYR 6 per order, up from MYR 5 three months ago because of overtime since a packing station became a bottleneck. Other variable costs are MYR 2 per order and fixed costs are MYR 140,000 a week. The target is a profit of MYR 60,000 a week. Where is the gap, and what do you do?
2. Answers to clarifying questions
This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.
3. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Weekly profit = orders x (price minus variable cost per order) minus fixed cost
- Revenue: orders x price per order
- Variable cost per order
- Labour, including overtime
- Other variable costs
- Fixed cost
4. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Revenue
What a strong candidate does: 40,000 orders at MYR 12 each.
Weekly revenue (MYR): 40,000 × 12 = 480,000
Step 2: Variable cost
What a strong candidate does: Labour of MYR 6 plus other costs of MYR 2, on every order.
Weekly variable cost (MYR): 40,000 × (6 + 2) = 320,000
Step 3: Profit today
What a strong candidate does: Revenue minus variable cost minus the MYR 140,000 fixed cost.
Weekly profit (MYR): 480,000 - 320,000 - 140,000 = 20,000
Step 4: The gap
What a strong candidate does: The target minus profit today.
Gap to target (MYR a week): 60,000 - 20,000 = 40,000
Step 5: Value of fixing the overtime
What a strong candidate does: Bring labour back from MYR 6 to MYR 5 per order across all orders.
Weekly saving from labour at MYR 5 (MYR): 40,000 × (6 - 5) = 40,000
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Profit is MYR 20,000 a week against a MYR 60,000 target. The whole MYR 40,000 gap comes from overtime, caused by the packing bottleneck. Bringing labour back to MYR 5 per order closes the gap exactly. I would fix the packing station first, because it removes the need for overtime without cutting staff. For example, I would add a second packing line at peak hours or move two pickers to packing. The weekly measure is orders packed per labour hour, reviewed every Monday with the shift leaders. I would also set a date for labour cost per order to reach MYR 5. I would protect delivery times while doing it, because a cheaper week that misses retailers' deadlines loses the contract.
Risks a strong answer names: Volume growth could create a new bottleneck elsewhere; Staff who relied on overtime pay may object.
Next steps: Time each step for one week to confirm packing is the bottleneck; Agree the plan with shift leaders before changing shift schedules.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?
Total
0 out of 25
Score all five criteria to see the band and the feedback template.
Next: another case in Partner mode
Swap roles and run the next case, so you both practise answering and scoring.